Li Auto previously aimed to sell as many as 800,000 vehicles in 2024, and become the best-selling premium car brand in China.

(Image credit: CnEVPost)

Li Auto (NASDAQ: LI) unexpectedly lowered its guidance for first-quarter deliveries yesterday. A new report said the company had lowered its sales target for the full year accordingly.

Li Auto now expects to sell between 560,000 and 640,000 units for the full year of 2024, down from the previous 650,000 to 800,000 units, local media outlet Xchuxing said in a report yesterday, citing the company's meeting minutes.

The high-profile carmaker announced yesterday that the company now expects vehicle deliveries in the first quarter to be in the range of 76,000 to 78,000 units, down from the previous figure of 100,000 to 103,000 units due to a lower-than-expected order intake.

On February 1, the company said in announcing January deliveries that it would challenge itself with a new high target of 800,000 annual deliveries for China's best-selling premium car brand.

The official mention of the target comes after Li Xiang, Li Auto's founder, chairman and CEO, hinted on January 1 that the company would challenge annual deliveries of 800,000 units as well as monthly deliveries of 100,000 units in 2024.

The downward revision of the first-quarter delivery guidance is mainly due to the weaker-than-expected performance of its first battery electric vehicle (BEV) model, the Li Mega MPV (Multi-Purpose Vehicle), after its launch.

Li Auto's management has repeatedly said that the Li Mega will be the best-selling model in China with a price tag of more than 500,000 yuan ($69,220). One executive said in a local media interview that the Li Mega will challenge monthly sales of 8,000 units after its launch.

"First, we want to acknowledge that the operating strategy of Li Mega was mis-paced," Li said in a statement yesterday.

Li Auto's updated first quarter delivery guidance is relatively conservative and the order book now needs to be watched, the meeting minutes shared by Xchuxing showed.

Li Auto's monthly deliveries for the Li Mega are now expected to be more than 2,000 units, with a chance to hit 4,000-5,000 units in the fourth quarter, according to the minutes.

The company's expectations for the upcoming new extended-range electric vehicle (EREV) model, the Li L6, remain unchanged at steady state sales of over 20,000 units.

The Li L6 will be the first Li Auto model priced under RMB 300,000 and will be launched in April, the company's senior vice president, Zou Liangjun, said in a January 12 interview with local media.

The Li L6 aims to challenge monthly sales of 30,000 units, Zou said at the time.

The Li L6 appeared in a regulatory filing catalog with China's Ministry of Industry and Information Technology on January 15, paving the way for its launch.

Li Auto is still looking for a gross margin of greater than 20 percent for the first quarter and the full year, according to the minutes of the meeting.

($1 = RMB 7.2239)

Li Auto cuts guidance for Q1 deliveries due to lower-than-expected order intake